Pittsburgh-based Allegheny Health Network reported an operating loss of $31.3 million in the first quarter of 2024, a $4.9 million improvement from the $36.2 million loss it reported in the same period in 2023, according to its May 30 finance report.
Allegheny Health Network said the improvement was driven by higher volumes across the organization, higher pharmacy revenue, favorable Medicare wage index and market basket increases, and third-party payer adjustments.
Total revenues increased 6.4% year over year to $1.2 billion for the three months ended March 31. Net patient revenue increased 6.2% to $1.1 billion.
Total operating expenses climbed 5.8% year over year to $1.3 billion. Salaries, wages and fringe benefits increased 3.8% to $671 million. Patient care supply expenses rose 11.3% year over year to $295.3 million.
The system said salaries, wages and fringe benefit costs increased due to workforce investments, utilization of physician contract labor and quality-based physician compensation redesign. These were offset by decreased utilization of temporary nursing labor.
Patient care supplies expense increases were driven by increased volumes, offset by supply chain improvements to manage acquisition cost and inventory levels, the system said. The expansion of the retail pharmacy and infusion programs also contributed to increased drug expense, "which drove overall favorable margin on that service line."
Allegheny Health Network posted a net loss of $26.8 million for the quarter after posting a $18.3 million net loss in the same period in 2023. The system said the $8.5 million decline was primarily due to a decline in investment results "due to market volatility and a reduction in unrestricted assets available for investment."